BILLERICA, Mass.--(BUSINESS WIRE)--
Entegris, Inc. (NasdaqGS: ENTG), a leader in specialty chemicals and advanced materials solutions for the microelectronics industry, today reported its financial results for the Company’s fourth quarter and fiscal year ended December 31, 2017.
The Company reported sales of $1.3 billion for fiscal 2017, an increase of 14 percent from the prior year. Net income for the year was $85.1 million, or $0.59 per diluted share, which included amortization of intangible assets of $44.0 million, asset impairment charges of $13.2 million, $2.7 million of severance expenses, $20.7 million related to the refinancing of senior notes, and $66.7 million related to the effects of the Tax Cuts and Jobs Act. In the prior year, net income was $97.1 million, or $0.68 per diluted share, which included amortization of intangible assets of $44.3 million, asset impairment charges of $5.8 million, and $2.4 million of severance expenses. Non-GAAP net income for fiscal 2017 was $206.3 million, or $1.44 per diluted share, which increased from $132.8 million, or $0.94 per diluted share, in the prior year.
Fourth-quarter sales were $350.6 million, an increase of 14 percent from the same quarter last year and 1 percent higher sequentially. Fourth-quarter net loss was $28.3 million, or $0.20 per diluted share, which included amortization of intangible assets of $11.0 million, $20.7 million related to the refinancing of senior notes, and $66.7 million related to the effects of the Tax Cuts and Jobs Act. Non-GAAP net income was $59.7 million, or $0.42 per diluted share, which compared to $34.3 million, or $0.24 per diluted share, in the same quarter a year ago. In the fourth quarter of 2017, the Company generated cash from operations less capital expenditures, or free cash flow, of $60.1 million.
Bertrand Loy, president and chief executive officer, said: “The fourth quarter marked our fifth consecutive record quarter, capping the most successful year in Entegris’ 51-year history. We grew fiscal 2017 sales 14 percent to $1.3 billion, achieving growth across all three divisions, driven by demand for our solutions in advanced memory, logic, and mainstream semiconductor production. We were very pleased with the quality of execution by the Entegris teams around the world. We delivered on our commitment to grow our bottom line at twice the rate of our top line, increasing our adjusted EBITDA by 35 percent to a record high of $357 million, or 26.6 percent of sales for the year. This strong cash flow is allowing us to create significant value through a balanced capital allocation strategy consisting of internal growth investments, strategic acquisitions, and returning available cash to shareholders through dividends and share repurchases.
Mr. Loy added: "As we look ahead, we have great conviction that the semiconductor industry is in the midst of a multi-year period of growth driven by broadening demand related to artificial intelligence, automotive, industrial, and other new applications. Our value proposition, which is built on a broad array of solutions, is enabling us to expand our served markets and will allow us to continue to outpace our markets."
Quarterly Financial Results Summary
(in thousands, except
per share data)
| GAAP Results |
Q4-2017 |
Q4-2016 |
Q3-2017 |
|||||||||
| Net sales | $350,562 | $308,502 | $345,591 | |||||||||
| Operating income | $71,152 | $44,905 | $60,655 | |||||||||
| Operating margin | 20.3 | % | 14.6 | % | 17.6 | % | ||||||
| Net (loss) income | $(28,341) | $26,098 | $40,902 | |||||||||
| Diluted (loss) earnings per share (EPS) | $(0.20) | $0.18 | $0.28 | |||||||||
| Non-GAAP Results | ||||||||||||
| Non-GAAP adjusted operating income | $82,172 | $55,843 | $81,077 | |||||||||
| Adjusted operating margin | 23.4 | % | 18.1 | % | 23.5 | % | ||||||
| Non-GAAP net income | $59,694 | $34,294 | $56,989 | |||||||||
| Non-GAAP EPS | $0.42 | $0.24 | $0.40 | |||||||||
First-Quarter Outlook
For the first quarter ending March 31, 2018, the Company expects sales of $355 million to $365 million, net income of $49 million to $56 million, and net income per diluted share between $0.34 and $0.39. On a non-GAAP basis, EPS is expected to range from $0.39 to $0.44 per diluted share, which reflects net income on a non-GAAP basis in the range of $56 million to $63 million, which is adjusted for expected amortization expense of approximately $11 million or $0.05 per share.
Segment Results
The Company reports its results in the following segments:
Specialty Chemicals and Engineered Materials (SCEM): SCEM provides high-performance and high-purity process chemistries, gases and materials, as well as safe and efficient delivery systems to support semiconductor and other advanced manufacturing processes.
Microcontamination Control (MC): MC solutions purify critical liquid chemistries and gases used in semiconductor manufacturing processes and other high-technology industries.
Advanced Materials Handling (AMH): AMH develops solutions to monitor, protect, transport, and deliver critical liquid chemistries and substrates for a broad set of applications in the semiconductor industry and other high-technology industries.
Fourth-Quarter Results Conference Call Details
Entegris will hold a conference call to discuss its results for the fourth quarter on Tuesday, February 6, 2018, at 9:00 a.m. Eastern Time. Participants should dial 1-800-281-7973 or 1-323-794-2093, referencing confirmation code 4357050. Participants are asked to dial in 5 to 10 minutes prior to the start of the call. For a replay of the call, please Click Here using passcode 4357050. The replay will be available starting at 12:00 p.m. ET on Tuesday, February 6 until Thursday, March 22 at 12:00 p.m. A live and on-demand webcast of the call can also be accessed from the investor relations section of Entegris’ website at www.entegris.com.
Management’s slide presentation concerning the results for the fourth quarter and fiscal year, which may be referred to during the call, will be posted on the investor relations section of www.entegris.com Tuesday morning.
ABOUT ENTEGRIS
Entegris is a leader in specialty chemicals and advanced materials solutions for the microelectronics industry and other high-tech industries. Entegris is ISO 9001 certified and has manufacturing, customer service and/or research facilities in the United States, China, France, Germany, Israel, Japan, Malaysia, Singapore, South Korea and Taiwan. Additional information can be found at www.entegris.com.
Non-GAAP Information
The Company’s condensed consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States (GAAP). Adjusted EBITDA, Adjusted Gross Profit, Adjusted Segment Profit, and Adjusted Operating Income together with related measures thereof, and non-GAAP EPS, are considered “Non-GAAP financial measures” under the rules and regulations of the Securities and Exchange Commission. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision-making, as a means to evaluate period-to-period comparisons, as well as comparisons to our competitors' operating results. Management believes that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of our recurring business operating results, such as amortization, depreciation and discrete cash charges that are infrequent in nature. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing and understanding our results and performance and when planning, forecasting, and analyzing future periods. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze our business. The reconciliations of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA, GAAP Gross Profit to Adjusted Gross Profit, GAAP Segment Profit to Adjusted Operating Income, and GAAP to Non-GAAP Earnings per Share are included elsewhere in this release.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “intends,” “estimate,” “forecast,” “project,” “should,” “may,” “will,” “would” or the negative thereof and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include statements related to future period guidance; future sales, net income, net income per diluted share, non-GAAP EPS, non-GAAP net income, expenses and other financial metrics; our performance relative to our markets; market and technology trends; the development of new products and the success of their introductions; Company's capital allocation strategy, which may be modified at any time for any reason, including share repurchases, dividends, debt repayments and potential acquisitions; the effect of the Tax Cuts and Jobs Act on our capital allocation strategy; the impact of the acquisitions we have made and commercial partnerships we have established; our ability to execute on our strategies; and other matters. These statements involve risks and uncertainties, and actual results may differ. These risks and uncertainties include, but are not limited to, weakening of global and/or regional economic conditions, generally or specifically in the semiconductor industry, which could decrease the demand for our products and solutions; our ability to meet rapid demand shifts; our ability to continue technological innovation and introduce new products to meet our customers' rapidly changing requirements; our concentrated customer base; our ability to identify, effect and integrate acquisitions, joint ventures or other transactions; our ability to protect and enforce intellectual property rights; operational, political and legal risks of our international operations; our dependence on sole source and limited source suppliers; the increasing complexity of certain manufacturing processes; raw material shortages and price increases; changes in government regulations of the countries in which we operate; fluctuation of currency exchange rates; fluctuations in the market price of Entegris’ stock; the level of, and obligations associated with, our indebtedness; and other risk factors and additional information described in our filings with the Securities and Exchange Commission, including under the heading “Risks Factors" in Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2016, filed on February 17, 2017, and in our other periodic filings. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates.
| Entegris, Inc. and Subsidiaries | ||||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||||
| (In thousands, except per share data) | ||||||||||||
| (Unaudited) | ||||||||||||
| Three months ended | ||||||||||||
| December 31, 2017 | December 31, 2016 | September 30, 2017 | ||||||||||
| Net sales | $350,562 | $308,502 | $345,591 | |||||||||
| Cost of sales | 186,883 | 176,702 | 190,184 | |||||||||
| Gross profit | 163,679 | 131,800 | 155,407 | |||||||||
| Selling, general and administrative expenses | 55,018 | 48,734 | 57,699 | |||||||||
| Engineering, research and development expenses | 26,489 | 27,223 | 26,002 | |||||||||
| Amortization of intangible assets | 11,020 | 10,938 | 11,051 | |||||||||
| Operating income | 71,152 | 44,905 | 60,655 | |||||||||
| Interest expense, net | 7,533 | 8,983 | 7,599 | |||||||||
| Other expense, net | 21,696 | 1,303 | 2,906 | |||||||||
| Income before income tax expense | 41,923 | 34,619 | 50,150 | |||||||||
| Income tax expense | 70,264 | 8,521 | 9,248 | |||||||||
| Net (loss) income | $(28,341) | $26,098 | $40,902 | |||||||||
| Basic net (loss) income per common share: | $(0.20) | $0.18 | $0.29 | |||||||||
| Diluted net (loss) income per common share: | $(0.20) | $0.18 | $0.28 | |||||||||
| Weighted average shares outstanding: | ||||||||||||
| Basic | 141,329 | 141,315 | 141,684 | |||||||||
| Diluted | 141,329 | 142,631 | 143,594 | |||||||||
| Entegris, Inc. and Subsidiaries | ||||||||||
| Condensed Consolidated Statements of Operations | ||||||||||
| (In thousands, except per share data) | ||||||||||
| (Unaudited) | ||||||||||
| Twelve months ended | ||||||||||
| December 31, 2017 | December 31, 2016 | |||||||||
| Net sales | $1,342,532 | $1,175,270 | ||||||||
| Cost of sales | 733,547 | 666,579 | ||||||||
| Gross profit | 608,985 | 508,691 | ||||||||
| Selling, general and administrative expenses | 216,194 | 201,901 | ||||||||
| Engineering, research and development expenses | 106,951 | 106,991 | ||||||||
| Amortization of intangible assets | 44,023 | 44,263 | ||||||||
| Operating income | 241,817 | 155,536 | ||||||||
| Interest expense, net | 31,628 | 36,528 | ||||||||
| Other expense (income), net | 25,458 | (991 | ) | |||||||
| Income before income tax expense | 184,731 | 119,999 | ||||||||
| Income tax expense | 99,665 | 22,852 | ||||||||
| Net income | $85,066 | $97,147 | ||||||||
| Basic net income per common share: | $0.60 | $0.69 | ||||||||
| Diluted net income per common share: | $0.59 | $0.68 | ||||||||
| Weighted average shares outstanding: | ||||||||||
| Basic | 141,553 | 141,093 | ||||||||
| Diluted | 143,518 | 142,050 | ||||||||
| Entegris, Inc. and Subsidiaries | |||||||||
| Condensed Consolidated Balance Sheets | |||||||||
| (In thousands) | |||||||||
| (Unaudited) | |||||||||
| December 31, 2017 | December 31, 2016 | ||||||||
| ASSETS | |||||||||
| Cash and cash equivalents | $625,408 | $406,389 | |||||||
| Accounts receivable, net | 183,434 | 165,675 | |||||||
| Inventories | 198,089 | 183,529 | |||||||
| Deferred tax charges and refundable income taxes | 18,012 | 20,140 | |||||||
| Other current assets | 32,665 | 24,398 | |||||||
| Total current assets | 1,057,608 | 800,131 | |||||||
| Property, plant and equipment, net | 359,523 | 321,562 | |||||||
| Goodwill | 359,688 | 345,269 | |||||||
| Intangible assets | 182,430 | 217,548 | |||||||
| Deferred tax assets - non-current | 9,103 | 8,022 | |||||||
| Other assets | 7,820 | 7,000 | |||||||
| Total assets | $1,976,172 | $1,699,532 | |||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||
| Long-term debt, current maturities | $100,000 | $100,000 | |||||||
| Accounts payable | 68,762 | 61,617 | |||||||
| Accrued liabilities | 99,374 | 83,530 | |||||||
| Income tax payable | 22,835 | 16,424 | |||||||
| Total current liabilities | 290,971 | 261,571 | |||||||
| Long-term debt, excluding current maturities | 574,380 | 484,677 | |||||||
| Other liabilities | 117,803 | 54,066 | |||||||
| Shareholders’ equity | 993,018 | 899,218 | |||||||
| Total liabilities and shareholders’ equity | $1,976,172 | $1,699,532 | |||||||
| Entegris, Inc. and Subsidiaries | ||||||||||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||||||||||
| (In thousands) | ||||||||||||||||
| (Unaudited) | ||||||||||||||||
| Three months ended | Twelve months ended | |||||||||||||||
| December 31, 2017 | December 31, 2016 | December 31, 2017 | December 31, 2016 | |||||||||||||
| Operating activities: | ||||||||||||||||
| Net (loss) income |
$(28,341 |
) |
$26,098 | $85,066 | $97,147 | |||||||||||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||||||||||
| Depreciation | 15,035 | 14,303 | 58,208 | 55,623 | ||||||||||||
| Amortization | 11,020 | 10,938 | 44,023 | 44,263 | ||||||||||||
| Stock-based compensation expense | 3,849 | 3,373 | 15,306 | 13,436 | ||||||||||||
| Provision for deferred income taxes | 1,841 | (15,770 | ) | 2,095 | (16,284 | ) | ||||||||||
| Loss on extinguishment of debt | 20,687 | — | 20,687 | — | ||||||||||||
| Other | 4,267 | 3,326 | 28,295 | 22,993 | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||
| Trade accounts and notes receivable | (56 | ) | (3,046 | ) | (15,401 | ) | (25,298 | ) | ||||||||
| Inventories | (5,330 | ) | (2,575 | ) | (20,214 | ) | (19,871 | ) | ||||||||
| Accounts payable and accrued liabilities | 8,377 | 4,777 | 15,975 | 31,294 | ||||||||||||
| Income taxes payable and refundable income taxes | 62,385 | 14,592 | 64,049 | 3,408 | ||||||||||||
| Other | (7,993 | ) | 1,063 | (4,716 | ) | 844 | ||||||||||
| Net cash provided by operating activities | 85,741 | 57,079 | 293,373 | 207,555 | ||||||||||||
| Investing activities: | ||||||||||||||||
| Acquisition of property and equipment | (25,658 | ) | (19,992 | ) | (93,597 | ) | (65,260 | ) | ||||||||
| Acquisition of business | — | — | (20,000 | ) | — | |||||||||||
| Other | 68 | 94 | 1,142 | (1,426 | ) | |||||||||||
| Net cash used in investing activities | (25,590 | ) | (19,898 | ) | (112,455 | ) | (66,686 | ) | ||||||||
| Financing activities: | ||||||||||||||||
| Payments on long-term debt | (385,000 | ) | (25,000 | ) | (460,000 | ) | (75,000 | ) | ||||||||
| Proceeds from long-term borrowings | 550,000 | — | 550,000 | — | ||||||||||||
| Payments for debt extinguishment costs | (16,200 | ) | — | (16,200 | ) | — | ||||||||||
| Issuance of common stock | 1,984 | 1,952 | 5,566 | 4,844 | ||||||||||||
| Taxes paid related to net share settlement of equity awards | (480 | ) | (702 | ) | (5,887 | ) | (4,018 | ) | ||||||||
| Repurchase and retirement of common stock | (10,000 | ) | (4,000 | ) | (28,000 | ) | (7,573 | ) | ||||||||
| Dividend payments | (9,896 | ) | — | (9,896 | ) | — | ||||||||||
| Other | (7,062 | ) | (493 | ) | (8,332 | ) | — | |||||||||
| Net cash provided by (used in) financing activities | 123,346 | (28,243 | ) | 27,251 | (81,747 | ) | ||||||||||
| Effect of exchange rate changes on cash | 6,714 | (14,326 | ) | 10,850 | (2,558 | ) | ||||||||||
| Increase (decrease) in cash and cash equivalents | 190,211 | (5,388 | ) | 219,019 | 56,564 | |||||||||||
| Cash and cash equivalents at beginning of period | 435,197 | 411,777 | 406,389 | 349,825 | ||||||||||||
| Cash and cash equivalents at end of period | $625,408 | $406,389 | $625,408 | $406,389 | ||||||||||||
| Entegris, Inc. and Subsidiaries | |||||||||||||||
| Segment Information | |||||||||||||||
| (In thousands) | |||||||||||||||
| (Unaudited) | |||||||||||||||
| Three months ended | Twelve months ended | ||||||||||||||
| Net sales | December 31, 2017 | December 31, 2016 | September 30, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||
| Specialty Chemicals and Engineered Materials | $125,339 | $110,945 | $124,522 | $485,470 | $428,328 | ||||||||||
| Microcontamination Control | 115,650 | 98,717 | 116,113 | 436,225 | 362,658 | ||||||||||
| Advanced Materials Handling | 109,573 | 98,840 | 104,956 | 420,837 | 384,284 | ||||||||||
| Total net sales | $350,562 | $308,502 | $345,591 | $1,342,532 | $1,175,270 | ||||||||||
| Three months ended | Twelve months ended | ||||||||||||||
| Segment profit | December 31, 2017 | December 31, 2016 | September 30, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||
| Specialty Chemicals and Engineered Materials | $35,898 | $25,919 | $34,647 | $132,859 | $96,060 | ||||||||||
| Microcontamination Control | 44,666 | 31,719 | 43,984 | 160,715 | 110,042 | ||||||||||
| Advanced Materials Handling | 23,240 | 16,644 | 16,882 | 77,971 | 73,452 | ||||||||||
| Total segment profit | 103,804 | 74,282 | 95,513 | 371,545 | 279,554 | ||||||||||
| Amortization of intangibles | 11,020 | 10,938 | 11,051 | 44,023 | 44,263 | ||||||||||
| Unallocated expenses | 21,632 | 18,439 | 23,807 | 85,705 | 79,755 | ||||||||||
| Total operating income | $71,152 | $44,905 | $60,655 | $241,817 | $155,536 | ||||||||||
|
Entegris, Inc. and Subsidiaries |
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Reconciliation of GAAP Gross Profit to Adjusted Gross Profit |
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(In thousands) |
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|
(Unaudited) |
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| Three months ended | Twelve months ended | ||||||||||||||
| December 31, 2017 | December 31, 2016 | September 30, 2017 | December 31, 2017 | December 31, 2016 | |||||||||||
| Net sales | $350,562 | $308,502 | $345,591 | $1,342,532 | $1,175,270 | ||||||||||
| Gross profit-GAAP | $163,679 | $131,800 | $155,407 | $608,985 | $508,691 | ||||||||||
| Adjustments to gross profit: | |||||||||||||||
| Severance related to organizational realignment | — | — | 740 | 740 | 431 | ||||||||||
| Impairment of equipment | — | — | 3,364 | 5,330 | 5,826 | ||||||||||
| Adjusted gross profit | $163,679 | $131,800 | $159,511 | $615,055 | $514,948 | ||||||||||
| Gross margin - as a % of net sales | 46.7% | 42.7% | 45.0% | 45.4% | 43.3% | ||||||||||
| Adjusted gross margin - as a % of net sales | 46.7% | 42.7% | 46.2% | 45.8% | 43.8% | ||||||||||
|
Entegris, Inc. and Subsidiaries |
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|
Reconciliation of GAAP Segment Profit to Adjusted Operating Income |
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(In thousands) |
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|
(Unaudited) |
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| Three months ended | Twelve months ended | ||||||||||||||
| Segment profit-GAAP | December 31, 2017 | December 31, 2016 | September 30, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||
| Specialty Chemicals and Engineered Materials | $35,898 | $25,919 | $34,647 | $132,859 | $96,060 | ||||||||||
| Microcontamination Control | 44,666 | 31,719 | 43,984 | 160,715 | 110,042 | ||||||||||
| Advanced Materials Handling | 23,240 | 16,644 | 16,882 | 77,971 | 73,452 | ||||||||||
| Total segment profit | 103,804 | 74,282 | 95,513 | 371,545 | 279,554 | ||||||||||
| Amortization of intangible assets | 11,020 | 10,938 | 11,051 | 44,023 | 44,263 | ||||||||||
| Unallocated expenses | 21,632 | 18,439 | 23,807 | 85,705 | 79,755 | ||||||||||
| Total operating income | $71,152 | $44,905 | $60,655 | $241,817 | $155,536 | ||||||||||
| Segment profit margin-GAAP | |||||||||||||||
| Specialty Chemicals and Engineered Materials | 28.6% | 23.4% | 27.8% | 27.4% | 22.4% | ||||||||||
| Microcontamination Control | 38.6% | 32.1% | 37.9% | 36.8% | 30.3% | ||||||||||
| Advanced Materials Handling | 21.2% | 16.8% | 16.1% | 18.5% | 19.1% | ||||||||||
| Three months ended | Twelve months ended | |||||||||||||||||||
| Adjusted segment profit | December 31, 2017 | December 31, 2016 | September 30, 2017 | December 31, 2017 | December 31, 2016 | |||||||||||||||
| Specialty Chemicals and Engineered Materials 1 | $35,898 | $25,919 | $34,661 | $132,873 | $96,759 | |||||||||||||||
| Microcontamination Control 2 | 44,666 | 31,719 | 44,180 | 162,354 | 110,779 | |||||||||||||||
| Advanced Materials Handling 3 | 23,240 | 16,644 | 22,103 | 85,478 | 80,247 | |||||||||||||||
| Total adjusted segment profit | 103,804 | 74,282 | 100,944 | 380,705 | 287,785 | |||||||||||||||
|
Amortization of intangible assets 4 |
— | — | — | — | — | |||||||||||||||
|
Unallocated expenses 5 |
21,632 | 18,439 | 19,867 | 81,765 | 79,755 | |||||||||||||||
| Total adjusted operating income | $82,172 | $55,843 | $81,077 | $298,940 | $208,030 | |||||||||||||||
| Adjusted segment profit margin | ||||||||||||||||||||
| Specialty Chemicals and Engineered Materials | 28.6% | 23.4% | 27.8% | 27.4% | 22.6% | |||||||||||||||
| Microcontamination Control | 38.6% | 32.1% | 38.0% | 37.2% | 30.5% | |||||||||||||||
| Advanced Materials Handling | 21.2% | 16.8% | 21.1% | 20.3% | 20.9% | |||||||||||||||
1 Adjusted segment profit for Specialty Chemicals and
Engineered Materials for the three months ended September 30, 2017, and
the twelve months ended December 31, 2017 and December 31, 2016 excludes
charges for severance related to organizational realignment of $14, $14
and $699, respectively.
2 Adjusted segment profit for
Microcontamination Control excludes charges for impairment of equipment
and severance related to organizational realignment of $196 for the
three months ended September 30, 2017. Adjusted segment profit for
Microcontamination Control excludes impairment of equipment and charges
for severance related to organizational realignment of $1,639 and $737
for the twelve months ended December 31, 2017 and 2016, respectively.
3
Adjusted segment profit for Advanced Material Handling excludes
charges for impairment of equipment and severance related to
organizational realignment of $5,221 for the three months ended
September 30, 2017. Adjusted segment profit for Advanced Material
Handling excludes charges for impairment of equipment and severance
related to organizational realignment of $7,507 and $6,795 for the
twelve months ended December 31, 2017 and 2016, respectively.
4
Adjusted amortization of intangible assets excludes amortization
expense of $11,020, $10,938, and $11,051 for the three months ended
December 31, 2017, December 31, 2016, and September 30, 2017,
respectively, and $44,023 and $44,263 for the twelve months ended
December 31, 2017 and December 31, 2016, respectively.
5 Adjusted
unallocated expenses excludes charges for impairment of intangibles and
severance related to organizational realignment of $3,940 for the three
months ended September 30, 2017 and the twelve months ended December 31,
2017.
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Entegris, Inc. and Subsidiaries |
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|
Reconciliation of GAAP Net Income to Adjusted Operating Income and Adjusted EBITDA |
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(In thousands) |
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|
(Unaudited) |
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| Three months ended | Twelve months ended | |||||||||||||||||
| December 31, 2017 | December 31, 2016 | September 30, 2017 | December 31, 2017 | December 31, 2016 | ||||||||||||||
| Net sales | $350,562 | $308,502 | $345,591 | $1,342,532 | $1,175,270 | |||||||||||||
| Net (loss) income | $(28,341) | $26,098 | $40,902 | $85,066 | $97,147 | |||||||||||||
| Adjustments to net (loss) income: | ||||||||||||||||||
| Income tax expense | 70,264 | 8,521 | 9,248 | 99,665 | 22,852 | |||||||||||||
| Interest expense, net | 7,533 | 8,983 | 7,599 | 31,628 | 36,528 | |||||||||||||
| Other expense (income), net | 21,696 | 1,303 | 2,906 | 25,458 | (991) | |||||||||||||
| GAAP - Operating income | 71,152 | 44,905 | 60,655 | 241,817 | 155,536 | |||||||||||||
| Severance | — | — | 2,141 | 2,700 | 2,405 | |||||||||||||
| Impairment of equipment and intangibles 1 | — | — | 7,230 | 10,400 | 5,826 | |||||||||||||
| Amortization of intangible assets | 11,020 | 10,938 | 11,051 | 44,023 | 44,263 | |||||||||||||
| Adjusted operating income | 82,172 | 55,843 | 81,077 | 298,940 | 208,030 | |||||||||||||
| Depreciation | 15,035 | 14,303 | 14,785 | 58,208 | 55,623 | |||||||||||||
| Adjusted EBITDA | $97,207 | $70,146 | $95,862 | $357,148 | $263,653 | |||||||||||||
| Adjusted operating margin | 23.4% | 18.1% | 23.5% | 22.3% | 17.7% | |||||||||||||
| Adjusted EBITDA - as a % of net sales | 27.7% | 22.7% | 27.7% | 26.6% | 22.4% | |||||||||||||
1 Includes product line impairment charges of $3,364 classified as cost of sales for the three months ended September 30, 2017. Includes product line impairment charges of $5,330 and $5,826 classified as cost of sales for the twelve months ended December 31, 2017 and 2016, respectively.
Includes intangible impairment charge of $3,866 classified as selling general and administrative expense for both the three months ended September 30, 2017 and the twelve months ended December 31, 2017.
Includes product line impairment charge of $320 classified as selling general and administrative expense for the twelve months ended December 31, 2017.
Includes product line impairment charge of $884 classified as engineering, research and development expense for the twelve months ended December 31, 2017.
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Entegris, Inc. and Subsidiaries |
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Reconciliation of GAAP Net (Loss) Income to Non-GAAP Earnings per Share |
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(In thousands, except per share data) |
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(Unaudited) |
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| Three months ended | Twelve months ended | ||||||||||||||
| December 31, 2017 | December 31, 2016 | September 30, 2017 | December 31, 2017 | December 31, 2016 | |||||||||||
| GAAP net (loss) income | $(28,341) | $26,098 | $40,902 | $85,066 | $97,147 | ||||||||||
| Adjustments to net (loss) income: | |||||||||||||||
| Severance | — | — | 2,141 | 2,700 | 2,405 | ||||||||||
| Impairment of equipment and intangibles 1 | — | — | 10,030 | 13,200 | 5,826 | ||||||||||
| Loss on debt extinguishment | 20,687 | — | — | 20,687 | — | ||||||||||
| Net gain on sale of investments | — | — | — | — | (156) | ||||||||||
| Amortization of intangible assets | 11,020 | 10,938 | 11,051 | 44,023 | 44,263 | ||||||||||
| Tax effect of adjustments to net income and discrete items | (10,385) | (2,742) | (7,135) | (26,046) | (16,637) | ||||||||||
| Tax effect of Tax Cuts and Jobs Act | 66,713 | — | — | 66,713 | — | ||||||||||
| Non-GAAP net income | $59,694 | $34,294 | $56,989 | $206,343 | $132,848 | ||||||||||
| Diluted (loss) earnings per common share | $(0.20) | $0.18 | $0.28 | $0.59 | $0.68 | ||||||||||
| Effect of adjustments to net income | $0.61 | $0.06 | $0.11 | $0.85 | $0.25 | ||||||||||
| Diluted non-GAAP earnings per common share | $0.42 | $0.24 | $0.40 | $1.44 | $0.94 | ||||||||||
1 Includes product line impairment charges of $3,364 classified as cost of sales for the three months ended September 30, 2017. Includes product line impairment charges of $5,330 and $5,826 classified as cost of sales for the twelve months ended December 31, 2017 and 2016, respectively.
Includes intangible impairment charge of $3,866 classified as selling general and administrative expense for both the three months ended September 30, 2017 and the twelve months ended December 31, 2017.
Includes product line impairment charge of $320 classified as selling general and administrative expense for the twelve months ended December 31, 2017.
Includes product line impairment charge of $884 classified as engineering, research and development expense for the twelve months ended December 31, 2017.
Includes product line impairment charge of $2,800 classified as other expense for the three months ended September 30, 2017 and the twelve months ended December 31, 2017.
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